20 Steps To Start A Business in Malaysia As Foreigner

how to start a business in malaysia

It may not clear to all how to start a business in Malaysia as foreigner? and Do you know how much capital is required and what are the legal formalities? Making a smart plan is the best before start of investment. Economy of Malaysia is sustainable around last 1 decade. Check the market similar of other business rivals. Being Malaysia is a big market can target the location where business competition is lower. SWOT analysis might great ideas for you to collect market vibrate. In 2019 and onward, new ideas and plan can apply to win fighting with competitors. As you must know business is nothing but innovative idea to apply. Investment capital is logical sequence as nature of business. Make 5 to 6 years business plan as starting company and overcome every year with successful. Never hope a great result at the begging, within first 2 years.

Some key ideas , 20 steps take a note before starting a business in Malaysia as foreigners:

  1. Business Plan
  2. Smart multiple business ideas
  3. Survey market
  4. SWOT analysis
  5. Investment capital
  6. Company Formation
  7. Business Licenses
  8. Bank Account
  9. Export and import
  10. Local director
  11. Share Capital
  12. Business location
  13. Right staffs hiring
  14. Factory location
  15. Find distributors (Medium and Large companies)
  16. Export to Singapore
  17. Minimize production and operational cost (Medium and large companies)
  18. ESD permission
  19. Pay Tax
  20. Expand Business

Start Business as Step 1: Business Plan

No plan means no direction, you do not know your destination. Plan might be short term and long term. Short term for 1 to 2 years and long-term plan for 5 to 6 years. A company overcomes foundation level when cross 1 decade. 1-3 years business goes up and down, risk comes in. Sustain in market is big challenging for this period. As short plan looks back each after 6 months whether you are going on plan or not. Marketing, operational, finance and costing must double check. At the beginning, operation cost might be higher and marketing plan might not work well. Finance support might need to carry on business in Malaysia. Make plan A, B and C and let see the market. Once fail apply the second plan and find the alternate business plan.

Start Business as Step 2: Smart Multiple Business Ideas

One idea might not success and works. Let how will you do business in Malaysia when live overseas? Will you hire CEO or COO to look after your business? Let you will hire a senior to look after business in your absence. May I ask what is your nature of business? Speak with team of S & F Consulting Firm to advice you. Malaysia is not like India, Pakistan, Sri Lanka and Bangladesh. It is developing country; cost of operation will be higher than other countries. Big companies already taken marketplace so where is your place to do business? Check another city than Kuala Lumpur, like Penang, Johor Bahru, Sabah etc. New small business idea base on online and target people are new ages will be effective.

Start Business as Step 3: Survey market

Yes, before start business in Malaysia must survey the market. You may collect information from internet, physical visiting in places, speaking with local persons. Internet information might not actual unless speak with local. Buy some samples and check pricing. Collect information from friends and family and well-wishers. Contact the local research companies and pay some amount to collect specific information.

Start Business as Step 4: SWOT Analysis

Do you know your business rivals and your strength? If no, check which point you are strong for that can catch the consumers. Weakness sort out is smart job in business era. Each company must have weakness and hit the point making you stronger on same point. Opportunity must come in business life but use properly. Let, your main business competitor become weak and fall in trouble. This is right time to take the market for you. Threat must minimize to avoid risk.

Start Business as Step 5: Investment capital

Legal: To start service companies you might show capital in Ringgit 5000. It is ok for you considering legal perspective. Let, your nature of business is export and import. It is need in Ringgit 5000 or 500000 depend on items of goods. For manufacture business, Ringgit 500000 to 1000000 must need.
Actual: To start business in Malaysia as foreigners must visit several times are extra cost. Starting to operation many costs are added like office, staffs, utilities, machine, instruments and so on. Office set up, factory run, buy materials and other costs need to start business as local and foreigner.

Start Business as Step 6: Company Formation

The first step of starting your business in Malaysia is to find a name for your company. Once you find a name, you will need to head over to the Companies Commission of Malaysia where you will have to register your name and company. While it’s a very straightforward method, the problem arises with the availability of your name. There are certain restricted words which you cannot use as a company name. You cannot use a name which is already in use and every name you choose should end with “Shn Bhd” which is basically the Malayan term for Limited Company.

Do I need a remittance of RM 500, 000? A very common misconception regarding the starting of a business in Malaysia is that one has to remit a total of RM 500,000. Without the amount being remitted the company will not be incorporated in Malaysia. To make things clear, there is no rule such as this that exists. In fact, according to the Company Act 1965, there is no mentioning of remitting RM 500,000. There can be certain immigration issues prior to starting your business but that can be easily dealt with by obtaining the proper visa, as well as the correct business permit or licenses.


Start Business as Step 7: Local Directors

All private limited companies in Malaysia are required one shareholder who will act as director of own business. Some cases local director pays more importance for bank account and obtaining licenses. Local director will not take any shares of the company but act as silent director. He/ she must be permanent residency in Malaysia otherwise you will not get benefits. The sole purpose of local director is to handle local problems for the foreign investors.

Start Business as Step 8: Business Licenses

Company Registration from SSM is not enough to start business in Malaysia as foreigner. Some others permission is required as like signboard and premise license. Export, import, Halal, WRT, Manufacture and so on. Without license starting business is an offence. Never try if do, be ready to accept a gift of RM 50000/- from DBKL and/ or MBPJ. Which business licenses you need is depend on nature of business. Take a free advisory from S & F Consulting Firm to make you clear.

Start Business as Step 9: Bank Account

Whenever you are starting a business, the first thing you should check out is the banking conditions of that country. It does not matter where you are operating in, the banks are key to running a successful business because they will determine how much capital you can loan. In Malaysia, this is actually a very big problem. Most of the local banks will discourage you from opening a bank account with them because they will not allow you to borrow any money to finance your start up. In fact, only a handful of the international banks will allow you to borrow your initial capital. So, it is best to have a backup plan in terms of financing your company.


the requirement for starting a business in Malaysia

Start Business as Step 10: Export and import

In terms of starting export and import business must apply for license after company incorporation. Choice the port that you like to use for goods delivery. Goods sample and invoice copy attach along with application to obtain licenses. Check the market price in Malaysia and selection country where goods will be imported from. Custom costs add with other costs to set the price.

Start Business as Step 11: share capital

You can declare the business share as need and after consultation with S & F. There is no limit for your share capital in Malaysia. For all nature of businesses, we must recommend showing share capital in Ringgit 5000. Increase capital as maximum as need later.

Start Business as Step 12: Business Address

Permanent and present (Malaysia) business and residence are needed to start a business in Malaysia. If you do not have office address in Malaysia can use S & F Consulting Firm address. Later, can change the address as your own rental office address. Business address is the location of correspondence for connecting peoples. The address must be in commercial area as residence is not permitted for business.

Start A Business as Step 13: Staff Hiring

I can share practical salary range of some categories:

  1. Executive, experience 2-3 years, salary in Ringgit 2500-3000.
  2. Asst Manager, experience 4-5 years, salary in Ringgit 4000-5000
  3. Sr. Manager, experience 6-7 years, salary in Ringgit 6000-8000
  4. CEO, experience 10-15 years, salary in Ringgit 10000-25000

Start A Business as Step 14: Rent / Factory Office

As our idea office rent cost may start from RM 2000 (800 sft) to above that vary area of business. A large office area more than 1000 sft, cost might in Ringgit 4000.


Start A Business as Step 15: Find distributors

Yes, if the business is relating to consumer goods is recommended to set distribution strategy. Company and distributors both will force to sell out by minimum costing. Seals will be increased, and cost will be minimized, and profit will come in pocket. Make a good plan and agreement with distributors offering incentive.

Start A Business as Step 16: Export to Singapore

As Singapore is nearest country and depend on Malaysia to import water and daily basic foods to live on. So, keep focus about Singapore when expand business in overseas. Start business in Singapore from Malaysia is easier as many people work in Singapore living in Malaysia.

Start A Business as Step 17: Minimize production and operational cost

Costing is a vital fact of starting business. To minimize production and operation cost are challenging. If costing is high product selling cost will be higher that might be affected on sale.

Start A Business as Step 18: ESD permission

Unless company obtain permission from ESD, unable to hire foreign labors and employees. Contact S & F to guide same.

Start A Business as Step 19: Pay Tax

Income tax (SST) pay monthly basis or yearly basis to be regular company. Tax rate of SST is 6 percent. Whereas production tax is 15 percent.  

Start A Business as Step 20: Expand Business

Expand your business overseas and other cities where new market is opening. Opportunity create yourself or create automatically. Become Boss in new market area by service and costing.


Some other information should discuss as foreign investors who are planning to start a business in Malaysia. I guess you might get ideas how to start a business in Malaysia as foreigners. For any free consultation, must contact S & F Consulting Firm, (SFM Consulting Firm) to assist.

How to start a online business in Malaysia?

If any business like to start in Malaysia must need to incorporate Sdn Bhd to meet legal requirement. Online is the best ideas to do business in Malaysia being development country. Time is the most valuable than money in Malaysia. You must build up creative website development by what your goods and services will be displayed.

Which businesses are best to sell by online?

1. Watch
2. Electronics
3. Cloths
4. Recondition motor bike
5. Ticket
6. Travel package
7. Foods delivery order
8. Furniture
9. Luxurious ornament
10. Cosmetics

How to start food business in Malaysia?

Find out a shop in good place where people can come easily. Shop location near condominium and shopping mall is better. Connect with more people and give discount as promotion. Membership is general policy. Build well website to facilitate order by online easily. Online order mean big discount. Ensure delivery faster.

How to start Gym business?

Rent place where provides good parking. Keep boys and girls separate sections. Hire well instructors for free training and coaching. Come in live on Facebook and Instagram. Keep publicity in nearest place and target the young people. Students will get special discount like husband and wife get. Create awareness why Gym is need for health. Arrange games quarterly between Gym members and invite all seniors of the community.


Company Registration Expert Since 2012